How to pay off a student loan early
How to pay off a student loan early and jobs that you can do while you still studying. The reasons for why you should repay your student loan early and how important is for the education system.
Higher education is essential in becoming successful and getting a well-paid job. It mainly because degree holders are having better chances to get high paid jobs and develop their career successfully. When you hold a higher education diploma, you have considerable chances to be hired.
Many students would love to continue their studies and improve their education in the best possible way, but often, financial resources are the reason why many people either abandon their studies or choose to apply for a student loan.
Student loans are like a double-edged sword. If you choose to study with the purpose to get a well-paid job, re-paying your student loan shouldn’t be a problem. The bad side of getting a student loan is when you cannot repay back what you own, therefore you will be in debt your entire life.
What is a student loan?
A student loan is basically a sum of money which students can acquire for their education expenditures. This is the money that you will have to pay back when your salary is above a certain amount, according to terms and conditions of the loan company.
Student loans can be used to pay off tuition fee, board or room fee, and even for living expenses and study materials such as books and software.
In some cases, the student loans come with no interest while in other situations these are being offered with interest. Loans can also be your financial aid offer’s part from the school you are attending right now. But in most of the cases student loan are money federal government or bank lend to the students to pay off their educational costs.
However, it is always better to look for scholarships and grants first before looking into the student loan offers.
How student loan is helping you to get a higher education?
No credit demands
Most of the student loan offered by universities do not require a credit history. Usually, graduates and undergraduates have a low or inexistent credit history, which can be hard to apply and get a loan from banks, but that’s not the case when applying for student loans offered by government agencies.
Another cool aspect of getting a student loan through government agencies is that it won’t affect your credit score at all, even if you planning to get a mortgage in the future.
Low fees and rates
Student loans usually come up with a lower interest rate as compared to other private loan companies. Even more, if you are going to apply for a federal student loan, the interest rates are fixed and extremely low compared with banks or private lenders.
Best way to pay off your educational expenses
Without any doubt, student loans can be helpful for less privileged people whose parents aren’t able to pay tuition fees, or even individuals who need support to sustain their life but have no other option than to apply for a student loan.
Student loans offer you flexibility
Because governments want to support young people to study, they created a system that allows you to carry on with your education and postpone any repayments if you have economic problems or other reasons.
Federal student loans are pretty flexible in general. In case of any valid problem you can pause the re-payments for a certain period of time.
Interest costs can be subsidized
Students with higher financial needs can qualify for federal subsidized loan. The government will pay the interest of subsidized loan when they are in deferment.
A subsidized loan is a federal loan for undergraduate college students who are still in school, and need help to pay for tuition and related expenses.
Why you should pay off your student loan?
As much as you might like to delay the student loan repayments, is better to wipe that taught out of your head; and here is why.
First of all, a student loan has been created to support someone like you to get proper education. That’s money invested in yourself so you can have a successful career.
The system has proved to work by now, but recently the number of students who refuses to pay back their student loans has increased and if they don’t change their mindset quickly, we might have a serious problem and here is why.
There are two groups of students, the ones who genuine educate themselves to make a career and pay back their loans, and there is another group of people that choose not to pay back their debt, despite earning above the wage limit fixed by student loan lenders.
In UK you will have to make student loan repayments if you earn more than £21000 per year. Having said that, the group of people who plan to never pay back their debt have regular jobs, such as cleaning, warehouse workers, retail, construction and so on.
Some of these individuals have no intention to pursue a better-paid job so they can afford to pay back their debt, or they are working without a proper contract, just so they can avoid re-paying their student loans.
There are many reasons of why you should pay off your student loan as soon as possible. How would you sleep at night knowing you are debt free and have all the freedom you want? You will sleep like a baby, believe me.
Here are some important reasons why you should pay off your student loan faster:
- By paying off your student loan early it will help you save money later on and live freely without the stress that every month you have to deal with debt which the interest can change every year.
- Depending on the loan amount, it can take a sizeable chunk of your monthly income. The more money you pay monthly the sooner you will clear off your debt.
- Student loans are an important part of our education ecosystem. When you will pay off your student debt, then the money will go back to pay salaries to tutors, stabilize the system, or even offer loan to more students who are unable to afford their educational expenses. If you’re not going to repay your student loan, the education system will suffer radical changes, therefore the next generations of students will be impacted by your actions.
Methods to pay off your student loan early
When it comes to paying off your student loan faster, the best option is to make more payment than the minimum every month. Here are some other ways to consider too:
- You can also refinance
- Pay off your capitalized interest
- Stick to your repayment plan
- Enrol in an autopay plan
- Look out for competitions and prizes at your local college/university. This is a good source to start.
- Avoid spending money on fashion (you can start a social media page and get free clothes from brands who are willing to gift them to you if you have a little online audience).
- Move back with your parents and save everything you can
Jobs you can do while studying
- Find a high-paid job, like business advisor, or IT engineer
- Find micro jobs such as web design, writing and managing social media on platforms like Freelancer and Fiverr
- Consider getting a part-time job
- Start an online business while you still study, perhaps an online boutique
- Write a book while you still at Uni and get paid royalty fee
- Become a blogger and social media content creator and get paid campaigns with well-known brands. Intellifluence and GetBlogged are some of the best platforms to make money as a content creator
- Create an online course about something you master and sell it on Teachable, Udemy, your own blog.
- Be an English tutor
- Write eBooks and sell them directly from your blog or social media with SendOwl
- Share your knowledge with other students by creating webinars, or 1 to 1 lesson in your local area
- Become a personal trainer
- If you have a passion for beauty, then a beauty therapist and start offering mobile beauty services such as waxing, massage, nails, facials and haircut.
- Start a radio channel or podcast and use your university to spread the word about it. You will get approached by sponsors sooner than you think
- Start a YouTube channel and share your passion. There are many talented students who started a music career or daily vlogs and now are earning more than six figures a month
- Babysitting; this one is one of the most common jobs for students
- Consider becoming an Uber driver
- Deliveroo is well known to be a flexible job which makes it very suitable for students
- Online chat agent. Many corporations have integrated live chat customer support which you can do easily if you already love computers
- Photographer/personal photographer to social media influencers; you need to have a good eye for details and some talent to be able to do this job. Some photography networks to get started are PurplePort, Modelmaiyhem.com, Madcowmodels.com, Behance,
- Register with modelling agencies. Modelling agencies are accepting applications from everyone, all age, size and shape. As a student or even a graduate, you can sign-up with multiple agencies to have consistent work. Perhaps an agent might be a better option for you to manage your bookings and get you daily jobs. Remember that a reputable modelling agency will never ask you to pay for a membership or to give you jobs.
You might like to read:
After grants and scholarships, student loans or federal student loans is the best option for students to pay their academic fees.
I hope you enjoy reading this article and remember, to always pay your debt, this will make your life less complicated.
Let me know if you paid off your student loan and what methods you used by dropping a comment below.
Disclaimer: This article contains affiliate links which means I might receive a small commission if you register or purchase from my referral link, at no extra cost to you.